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What should you do if a breach of contract occurs?

On Behalf of | Dec 14, 2021 | business litigation

This is a busy time of year for your business, so you have no choice but to be strict with your vendors and suppliers. You expect everyone to stick to their contracts and to deliver goods on time.

When one of your suppliers or vendors doesn’t do what they said they would, it can make your life as a business owner much more difficult. So, what do you do? Do you completely sever the relationship? Do you forget about the issue and just try to work with the new schedule or arrangement they’re seeking?

When a breach of contract occurs, don’t jump to litigation

Yes, it is true that a breach of contract can cause serious problems for your business, but you don’t need to jump to litigation. Instead, there may be more reasonable solutions. 

  • You might opt to accept a penalty payment but keep the contract
  • You may forgive the one-time issue if it hasn’t happened before to help preserve the relationship
  • You may decide to end the contract and find a new vendor or supplier to work with
  • You could go to mediation or arbitration to handle disputes

It’s a good idea to go back and look at your original contract to see what kinds of dispute resolution options you have in place or if there are specific penalties that apply in this situation. If so, your contract may help protect your interests without having to end up in court. 

How you handle this breach will depend on what you want to do with your relationship with the other party and the current steps outlined for dispute resolution in your contract.